Malta’s gambling regulator is considering legalising the use of cryptocurrencies such as Bitcoin at online casinos.
Bitcoin casinos, as well as other digital currency gambling sites, have been around for years. However, they exist in an unregulated environment due to a lack of attention from gambling authorities.
In response to the advancing financial environment, the Malta Gaming Authority (MGA) has submitted a white paper to the Maltese government proposing the regulation of digital currencies.
“The Authority is cognisant that the rise of crypto-currencies is inevitable,” the paper reads.
“Conscious of the need to remain at the forefront of innovation and to keep up with new developments in technology and the industry … the Authority is committed to allow the use of cryptocurrencies by its licensees in the immediate future.”
The country is already advancing in terms of digital currencies with an entrepreneur recently installing the nations’ first cryptocurrency ATM machine. The terminal located outside a store in Sliema accepts bitcoin purchases and balances checks through the use of QR codes.
In an interview with cryptocurrency magazine CoinDesk, MGA Executive Chairman Joseph Cuschieri revealed that he believes digital currencies present both opportunities and risks to the gaming industry.
“The shape and form of the framework governing cryptocurrencies will be announced in due course and once the risk assessment is carried out,” Mr Cuschieri said.
“Once the results of the study are evaluated, the MGA will make its position official on how cryptocurrencies will be adopted.”
Mr Cuschieri was quick to add that although regulating digital currencies would attract new operators, the MGA would not be welcoming every application.
“Our key priority is always the integrity of our jurisdiction,” he said.
“Whoever does not meet our fit and proper, regulatory, anti-money laundering and consumer protection standards is not welcome in Malta.”
The Maltese government has been instrumental in the digital currency industry change.
Earlier this year, Prime Minister, Joseph Muscat, told the media that the government wants Malta to become the leading country in terms of digital currency use.
“We must be on the frontline in embracing this crucial innovation, and we cannot just wait for others to take action and copy them,” Prime Minister Muscat said.
“We must be the ones that others copy.”
Bitmalta, a local cryptocurrency advocacy group, praised the MGA’s proposals but believes that the regulator needs to move quickly to beat out other nations looking at legalising cryptocurrency gambling.
“Other jurisdictions such as the UK have already legislated in favour of the use of cryptocurrencies by remote gaming operators, and unless Malta wants to play second fiddle to such other jurisdictions, it should ramp up its efforts to embrace such technologies,” the company said in a statement.
But regulating cryptocurrencies is not that easy when it comes to the gambling industry. According to the MGA, it requires balancing player protection and anti-money laundering laws with the competitive pressure from other advanced gambling jurisdictions.
Additionally, many Bitcoin and other digital currency casinos currently operate in an unregulated environment which can cause issues in terms of whether operators are legitimate or not.
But Mr Cuschieri believes that the best way to stamp our rogue operators is to highlight them via a regulated industry.
“We firmly believe that the best way to control gambling, prevent criminal activity and protect players is through robust and effective regulation and enforcement,” he said.
“Prohibition or barriers only lead to underground activities and black market operations.
“The latter is not in the best interest of players and the sector in general. That is why it is best to establish transparent regulatory regimes so that we bring integrity and trust into the system.”
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